Gather All Your Papers for Taxes

Most of the papers you need to document the income, interest and withheld taxes you report arrive in your mailbox in January, with investment-related 1099s often coming in February. Get ready for their arrival by creating print and online folders. It's a good idea to create a paper and an email tax folder for messages relating directly to tax information.

Email announcements that documents are available online will land in your inbox. The postal service may deliver your W-2s in your physical mailbox — although some companies post them on a secure site for downloading. Mortgage providers, banks and other financial institutions often post important 1099 forms on your online account.

Paperless banking may have turned shoeboxes into receipt relics of the past, while your online statements often contain key backup records for such potential deductions as:

Charitable donations.

Outlays for health care.

Gambling winnings and losses.

Property tax expenditures.

Many of us ignore the line items on these statements until we start our annual tax-filing ritual. However you may save time by taking a few extra minutes each month to jot down tax-related information, like:

Expense title.

Check numbers.

Payee names.

Dollar amounts.

Dates.

Create a spreadsheet dedicated to tax records. Throughout the year, consider downloading and printing online documents that will be available for only a limited time.

Keeping Track of Everything

Here are some of the documents you should have handy:

Documents related to life events — marriage, death of a spouse or divorce, deductible alimony payment records, adoption papers, and child custody agreements should all be saved.

Paperwork related to childbirth. You'll want the newborn's Social Security card, childcare receipts and details on college savings plans.

State and local taxes. Save these documents so that they can be easily retrieved.

The value of a tax return doesn't end on April 15. You'll need to provide this document to get a mortgage, apply for student loans and check the status of your refund. Generally, the IRS can audit you for three years after a filing date, and in some cases, even longer. Hold on to your return copies and supporting documents just in case. The IRS can audit you years after you file, so be prepared.

Our firm provides the information in this e-newsletter for general guidance only,
and does not constitute the provision of legal advice, tax advice, accounting services,
investment advice, or professional consulting of any kind. The information provided herein should not be
used as a substitute for consultation with professional tax, accounting, legal, or other competent
advisers. Before making any decision or taking any action, you should consult a professional adviser who
has been provided with all pertinent facts relevant to your particular situation. Tax articles in this
e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of
avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided
"as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information,
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